New Developments on the Geothermal Insurance Market

Abstract

The presence of sector-specific risks in deep geothermal projects significantly contributes to the continuing investment reluctance and the relatively slow development in the industry. By now, technical drilling risks can be insured on a standard basis. However, the conditions for an offer of exploration risk insurances are much more difficult. Based on practical experiences from insurance negotiation in Germany, international discussions and engagements in the setup of new risk mitigation schemes, the current developments on the private geothermal insurance market and new approaches of insurance negotiations are summarized. Within a growing and increasingly competitive market, terms and conditions are changed in favor of project developers. Against the background of more successful projects and more experienced data available to policy providers, exploration risk insurances will continuously become more affordable and more widely available. The current changes are expected to act as a market incentive and to contribute to an accelerated geothermal project development.